We all know what’s going on in the world today. Conflicts are occurring around the world. Wars, De-risking, even… Brexit… You can’t turn on the news without being confronted with conflict around the world. It’s clear that more and more conflict in the world leads to financial instability within countries.
For the purpose of this article, we will define financial stability as the state in which the financial system is resilient to economic shocks and smoothly fulfills its basic functions. According to the World Bank, “a stable financial system is capable of efficiently allocating resources, assessing and managing financial risks, maintaining employment levels close to the economy’s natural rate…” (worldbank.org). But, how can companies and organizations within these islands achieve and maintain financial stability? Let’s go back to basics. We know that financial stability in businesses translates into financial stability in the economy. Business must do well for the country to do well.
Achieving financial stability in business means you must have accurate accounting processes in the first place. It means you have to track the numbers, implement key performance indicators (KPI’s) and measure those numbers against the KPI’s and pivoting, if necessary, to implement strategies that will stabilize and grow the company. Who better to lead this charge but your Accountant?
By encouraging companies to continually define, reassess and enhance their risk-management practices and procedures, accountants solidify their roles as a major key to the stability of the organization.Accountants play a major role as partners in the process of creating and achieving financial stability, no matter where we work or in what capacity we function: accounting managers, advisers, financial administrators, internal and external auditors. By identifying weak internal controls and providing advice to strengthen those controls or directly implementing policies to strengthen those controls, accountants provide stability to the organization.
An Accountant with adequate business strategy training and adequate leadership capabilities can be seen as the company’s navigator, steering the company towards profitability and stability, helping that company to avoid the choppy turbulent waters of instability within the economy.
Accountants have analytical capabilities that allow them to delve behind the numbers and examine trends, provide reasons for variances with the end result being to offer solutions that will move the company or business forward or change its strategy, if necessary.
A good Accountant knows the story behind the numbers and can translate what is really going on in the company, because he or she has the ability to hold a magnifying glass to the day-to-day activities and look for clues that could make or break and organization.
Accountants have the task of keeping the numbers transparent and helping management and CEO’s understand the numbers so they can establish good business practices and controls. Good Accountants are essential in translating simple figures to a story about the business that can facilitate good decision-making. Excellent decision-making can stabilize and grow a company.
Accountants can also help individuals achieve stability in their personal affairs. Some Accountants can become your personal financial adviser to ensure that your investments and your personal net worth are growing at an adequate rate. Accountants trained in personal finance can give guidance whether you are in business or not.
The analytical duties of the Accountant in facilitating and maintaining financial stability never ends.
Financially-stable individuals, businesses and companies lead to stable economies. We encourage you to recognise that accountants are an important KEY to financial stability in your business affairs and personal matters and urge you to look to your Accountant for the guidance and support that you need.